China's Rare-Earth Monopoly

China's Rare-Earth Monopoly

An attractive material: Neodymium (shown here) is one of the rare-earth elements that are key to making very strong magnets for compact electric motors.

For three weeks, China has blocked shipments of rare-earth minerals to Japan, a move that has boosted the urgency of efforts to break Beijing’s control of these minerals. China now produces nearly all of the world’s supply of rare earths, which are crucial for a wide range of technologies, including hard drives, solar panels, and motors for hybrid vehicles.

In response to China’s dominance in production, researchers are developing new materials that could either replace rare-earth minerals or decrease the need for them. But materials and technologies are likely to take years to develop, and existing alternatives come with trade-offs.

China apparently blocked the Japan shipments in response to a territorial squabble in the South China Sea. Beijing has denied the embargo, yet the lack of supply may soon disrupt manufacturing in Japan, trade and industry minister Akihiro Ohata told reporters Tuesday.

Rare earths include 17 elements, such as terbium, which is used to make green phosphors for flat-panel TVs, lasers, and high-efficiency fluorescent lamps. Another of these elements, neodymium, is key to the permanent magnets used to make high-efficiency electric motors. Although well over 90 percent of the minerals are produced in China, they are found in many places around the world, and, in spite of their name, are actually abundant in the earth’s crust (the name is a hold-over from a 19th-century convention). In recent years, low-cost Chinese production and environmental concerns have caused suppliers outside of China to shut down operations.

Alternatives to rare earths exist for some technologies. One example is the induction motor used by Tesla Motors in its all-electric Roadster. It uses electromagnets rather than permanent rare-earth magnets. But such motors are larger and heavier than ones that use rare-earth magnets. As a rule of thumb, in small- and mid-sized motors, an electromagnetic coil can be replaced with a rare-earth permanent magnet of just 10 percent the size, which has helped make permanent magnet motors the preferred option for Toyota and other hybrid vehicle makers. In Tesla’s case, the induction motor technology was worth the trade-off, giving the car higher maximum power in more conditions, a top priority for a vehicle that can rocket from zero to 60 mph in 3.7 seconds. “The cost volatility going into the rare-earth permanent magnets was a concern,” says JB Straubel, Tesla’s chief technology officer. “We couldn’t have predicted the geopolitical tensions.”

More manufacturers are following Tesla’s lead to shun the rare-earth materials, although the move means sacrificing space and adding weight to vehicles. A week after the China dust-up began, a research team in Japan announced that it had made a hybrid-vehicle motor free of rare-earth materials, and Hitachi has announced similar efforts. BMW’s Mini E electric vehicle uses induction motors, and Tesla is supplying its drive trains to Toyota’s upcoming electric RAV 4. Given the volatility of rare-earth supplies, and the advantages induction motors offer in high performance applications, “It makes sense for car companies to give serious thought to using induction motors,” says Wally Rippel, senior scientist at AC Propulsion. Rippel previously worked on induction motor designs at Tesla and GM, where he helped to develop the seminal EV1.